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Comment by pliny | Hacker News Reader

>Returns like that are not asymmetrical and can only be produced with leverage, at least when you're trading paper.

Definitely not true, looking at their last 13f (filed in may 2026) their top3 holdings were BE, SNDK and CRWV which had 1y returns of 1,500%, 2,000% and 500% at the time of the filing. They accounted together for 15% of the fund (plus an unknown amount of exposure through options). These tickers show up in the 2 and 3 previous filings so they had exposure to some of that run up, and looking at the filings further back they had some very concentrated exposure to INTC in a half year period where the stock went up about 200%

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Sure, but 15% of your portfolio going up by 1000% isn't going to give you an overall 400%+ YTD return, which is where SALP was before this drop, and obviously it is no secret that they were highly leveraged.

Aschenbrenner obviously understood diversification, but was overconfident and greedy and used leverage to boost returns. He was lucky that Citadel saw fit to step in and buy their portfolio rather than having to dump it into the market which would likely have been far worse.

I was answering his point that 400% returns are impossible without leverage, and my argument was that they were in the right stocks at the right time to achieve those kinds of returns without leverage. Since a lot of their portfolio is/was options without strikes or durations listed and the exact dates of their buys/sells is unknown it's not possible (AFAIK) to reconstruct their P&L exactly but it seems plausible to me that, given the stocks they were concentrated in and the quarters they start reporting those positions, that they could have gotten 400% returns in a year without leverage. If I were an LP reading their filings saying that (for example) they held 25% of the fund in Intel during a half year period where it went up 200%, plus some other similar holdings, resulting in overall 400% returns I wouldn't automatically conclude they were levered.

Sure if you buy one stock and it goes up 1k percent it's possible. But that's unrealistic and being that concentrated is unacceptable for a fund.

Any sophisticated investor that read that a fund they were invested in a single name would be upset. Unless it's a special vehicle or they're activist and have a position for some strategic purpose. But just to let such a large percentage of your fund on a single name stock is insane.

I'll also add that options are essentially leverage. Leverage doesn't have to be borrowing it's just describing what $1 price change does to your position. You can buy at the money calls for 3-12% of the stock price. And they move up slightly less than $1 if stock goes up, so you're essentially getting 10-20x leverage. And if they're not above the strike price at expiration they're worthless

I don't have anything to say about their concentration beyond that if you read their early 13Fs (ex https://13f.info/13f/000204572425000006-situational-awarenes...) they were in fact "that concentrated" which is why it's plausible they got 100s of % returns without leverage. Re options being leverage - everything you said is true but unfortunately the public filings dont have strikes or durations so it's not possible to say whether they bought short dated otms with 0.05 delta or leaps with close to 1 delta or something in between.

Aschenbrenner is 25 years old. How many market upsets has he seen in his adult life?

Looking at their 13f filing (filed in may 2026), they had $8 billion of leveraged put options.

Interesting - I guess at least some attempt at hedging given that they held puts in some of the same stocks they were long on.

https://whalewisdom.com/filer/situational-awareness-lp

Or perhaps this was more of an attempt to lock in some profits while still riding it higher? It seems most of his puts were in the chip stocks while his portfolio was more focused on "next phase" datacenter/infra stocks.

They had very large put positions on stock that they had very small long stock positions in, I think they were net short in almost everything they held puts on (except the smh etf put which I guess is an attempt to cancel out sector beta)

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